CLEAN POWER PLAN

Republicans don't regret sinking Waxman-Markey

In the fierce congressional fight over comprehensive climate change legislation in 2009-10, the Obama administration warned it would act to curb heat-trapping emissions if lawmakers faltered.

Enter the Clean Power Plan, U.S. EPA's regulatory push to overhaul the nation's power grid.

With Capitol Hill Republicans slamming the new rule as a looming economic catastrophe and an illegal administrative overreach, GOP staffers who led the charge against climate legislation say they're still glad they torpedoed the cap-and-trade bill five years ago (Greenwire, Aug. 20).

"I've been talking with friends of mine who were on the Hill at the time with me, and we were sort of joking, 'Well, hey, should we have taken the deal?' And no, we should not have," a former Republican staffer said.

That former staffer and others express confidence the courts will limit EPA's rule or rescind it. And no matter what happens in the courtroom, they say, the power plant rule still isn't as bad as the massive bills championed by then-Reps. Henry Waxman (D-Calif.) and Ed Markey (D-Mass.) in the House and then-Sens. John Kerry (D-Mass.) and Joe Lieberman (D-Conn.) in the Senate.

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The 1,400-page "Clean Energy and Security Act" that cleared the House in the summer of 2009 would have authorized EPA to regulate emissions from the far reaches of the economy that now might never see carbon dioxide curbs. The bill would have spawned new programs and spending outside the cap-and-trade provision, which the former aide called "a big-government nightmare on steroids."

"If I were forced to choose, I would take the Clean Power Plan in a minute," the former aide said.

Fifteen states have already asked the U.S. Court of Appeals for the District of Columbia Circuit for an emergency stay of the rule, claiming that the Clean Air Act bars EPA from regulating carbon dioxide from power plants under Section 111(d) of the statute because it is already regulating the same sources for toxic emissions under a different section of the law (Greenwire, Aug. 14). A climate law would have disarmed this legislative "glitch" issue.

"No, I don't think you're going to get anybody to say there's some advantage to Waxman-Markey over the Clean Power Plan," a current senior Republican aide said.

Republicans express confidence that they will keep the final EPA rule from taking effect.

Their weapons: resolutions of disapproval under the Congressional Review Act, riders on appropriations bills and stand-alone legislation.

Their hope: The next president might be a Republican.

"We've also got time," the senior aide said.

The final Clean Power Plan calls for states to submit compliance plans by 2018 and start enforcement in 2022.

"They've already punted this outside of the Obama presidency," the senior aide said. "If you have a Republican president, it changes everything."

Another GOP aide said the rule's movement from EPA to the states will begin to attract the grass-roots opposition.

"You're going to see that awakening in the states that you really haven't quite seen yet," the aide said.

Republicans will spend time this fall tarring the power plant rule as "cap-and-trade repackaged," the aide said, highlighting warnings by Waxman-Markey's proponents and EPA that Clean Air Act rules would be a second-best option.

The aide pointed to a September 2009 newspaper story that quotes then-EPA Administrator Lisa Jackson warning her agency was poised to release its endangerment finding for greenhouse gas emissions, setting the stage for regulation.

"Legislation is so important, because it will combine the most efficient, most economy-wide, least costly [and] least disruptive way to deal with carbon dioxide pollution," Jackson is quoted as saying, adding that a bill would be preferable to "top-down regulation."

Remembering how sausage was made

Republicans staffers past and present are also quick to add that their party alone did not scuttle cap and trade. Then-Senate Majority Leader Harry Reid (D-Nev.) did not bring the Kerry-Lieberman package to the floor, they note, adding that it would have failed even in a year when Democrats enjoyed a rare 60-vote supermajority in the Senate.

Aaron Cutler, who was an aide to Rep. Joe Barton of Texas, then-ranking Republican on the House Energy and Commerce Committee when Waxman-Markey was moving through committee, said the bill was a product of an "unruly legislative process" that excluded Republicans.

"At the time, we just thought it was a giveaway, and it was based on who negotiated the best and who was in the room and what kind of allocations it got and when," said Cutler, who's now a partner in the legislative group at Hogan Lovells.

Waxman, who was then Energy and Commerce chairman, was still promising his more reluctant Democratic colleagues concessions even as his bill was on the floor, Cutler recalled.

"There really wasn't a clean way to do it if you were going to do it at all," he said, adding that Congress shouldn't have done it.

But former Rep. Rick Boucher (D-Va.) said the two-year process that led to the June 2009 House passage of the Waxman-Markey bill included substantial outreach to Republicans.

The coal-district Democrat was chairman of an Energy and Commerce subcommittee in 2007 and 2008, and his ranking member was the then-freshly ousted Speaker Dennis Hastert (R-Ill.). Boucher remembered meeting with Hastert and other top Republicans on a white paper he co-authored with then-Energy and Commerce Chairman John Dingell (D-Mich.).

That paper, Boucher said, made up the core of the bill co-sponsored by Waxman, who succeeded Dingell as chairman.

"Denny was very much a part of the process," said Boucher, who now leads the government strategies practice at Sidley Austin LLP.

In 2009, Boucher also led negotiations with Waxman and Markey to make their bill friendlier to states that rely heavily on coal-fired generation. Those concessions, together with changes won by oil-patch Democrats and other voting blocs, allowed the measure to finally clear the House, 219-212.

"We negotiated to the point where we achieved a comfort level with it," Boucher said. "I was comfortable with it, and the utilities were comfortable with it."

'Reality was very clear in 2007'

The Waxman-Markey bill allocated the vast majority of its emission allowances for free in the early years, and that considered utilities' historical emissions when distributing allowances. States can do the same under a Clean Power Plan implementation strategy, but EPA would not control those decisions.

The bill also provided two features that EPA can't give utilities under its Clean Air Act rule: the ability to offset emissions by funding unrelated reduction projects domestically and abroad, and $10 billion to be used to develop and deploy carbon capture and storage technology to keep as many coal-fired power plants online as possible. A new power plant rule that was finalized alongside the Clean Power Plan on Aug. 3 all but requires the use of CCS to limit new coal plants' emissions, but that technology would be applied at the utility's expense.

The measure also pre-empted some Clean Air Act requirements that would have affected coal-fired units, including possible Clean Air Act Section 111(d) rules and New Source Review requirements.

EPA predicted in 2009 that coal-fired generation would expand under Waxman-Markey, while its regulatory impact statement for the Clean Power Plan has coal dwindling to 27 percent of the nation's power supply by 2030 (although market changes undoubtedly play a role in that shift).

In the end, most major coal-fired utilities endorsed Waxman-Markey with the exception of Southern Co., which wrote in an email to Greenwire last night that the administration should have bowed to Congress and not tried to regulate carbon emissions under existing law.

Not generally a fan of new regulations for his state's coal sector, Boucher said he and Dingell accepted the science of man-made climate science. And they realized there was little hope to avoid new emission curbs after the Supreme Court's 2007 Massachusetts v. EPA ruling that directed the agency to consider whether greenhouse gases endangered human health.

"That reality was very clear in 2007," Boucher said. "And so if Congress did not act, EPA was going to do it on its own, and it simply did not have adequate tools under the old Clean Air Act to do a good job."